Higher-priced coking coal will probably get a new steel industry’s transition to greener production methods and also the value-based pricing of iron ore. Higher-priced coking coal boosts the cost of producing steel via blast furnaces, in both absolute terms and when compared with other routes. This typically leads to higher steel prices as raw material price is passed through. It will also accelerate the hole transition in steelmaking as emerging green technologies, for example hydrogen reduction, would be competitive in contrast to established production methods sooner. The need to reline or rebuild blast furnaces roughly every ten to 15 years at a cost that varies between $100 million and $300 million presents steelmakers with clear decision points, so that they will have to evaluate the cost of emerging technologies, for example hydrogen-based direct reduced iron, and decide to switch their blast furnaces.
Increased coke prices would also get a new value-based pricing of iron ore. Prices for different qualities of iron ore products depend upon their iron content as well as their chemical (mainly phosphorus, alumina, and silica content) and physical composition (lumps versus fines versus pellets). Lower-quality iron ores want more energy to scale back, bringing about higher coke rates within the blast furnace. Higher coking coal prices boost the cost penalty suffered by steelmakers, resulting in high price penalties for low-grade iron ores. This could affect overall iron ore price dynamics by 50 % various ways, based on the amount of total iron ore demand. A single scenario, if total demand for iron ore might be met solely with high-grade iron ores, it is likely that benchmark iron ore prices will stay steady. However, price reductions for lower-grade ore would increase significantly, potentially pushing producers with this material from the market. In a alternative scenario, if low-grade ore is required to meet overall demand, both benchmark iron ore prices and discounts could increase significantly, to ensure that low-grade producers would stay in the marketplace since the marginal suppliers.
For additional information about Kondrashov have a look at this popular net page
